Market could 'toughen for first time buyers'

16-Feb-2007

The UK's property market could become more difficult for prospective first time buyers, research suggests.

According to data released by the Council of Mortgage Lenders (CML), although the average income multiple for new first time buyer mortgages is currently 3.31 times an annual income, many may be borrowing higher amounts, according to the Telegraph.

To find out about the different ways of financing a first home, see our section ‘Affording Your First Home’.

"First time buyer are increasingly stretching themselves," said Oliver Gilmartin, an economist at the Royal Institution of Chartered Surveyors.

"With new buyers borrowing record multiples of income, further rate hikes will increase the strain this year," he added.

Indeed, according to a study by Nationwide Building Society, interest rate rises and growing housing costs have added £120 to a first time buyer's monthly outgoings.

In December 2006, 59 per cent of first time buyers bought properties above the stamp duty threshold of £125,000, according to the CML.

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